DVD consortium loses court case over DVD copying

Gaps in the CSS license lead a judge to rule in favor of a company that …

A California judge handed a victory to Kaleidescape, which manufactures home media servers, ruling that the company's products do not violate the DVD industry's CSS license. The company was sued by the DVD Copy Control Association, which said that Kaleidescape's media servers violate its standard licensing contract.

The Kaleidescape System is a kind of home media server on steroids. Starting at $10,000, it consists of a server, movie player, and music player. The server is designed to store all of the owner's movies and music, ripping them from their original source discs for playback at a later time. To no one's surprise, the DVD CCA took issue with that functionality, accusing Kaleidescape of opening the door to massive copyright infringement and arguing that any device that played movies from a DVD needed to have physical access to the disc in order to do so.

After a week-long trial, Judge Leslie C. Nichols ruled in Kaleidescape's favor, saying that the 20-page CSS spec was not technically included as part of the license agreement. As a result, the company is in full compliance with the DVD CCA's CSS license, noting in his decision that Kaleidescape had made "good faith efforts" to ensure that its products were fully compliant.

"Kaleidescape has been operating in the shadow of the DVD CCA's allegations for over three years," Michael Malcolm, CEO of Kaleidescape told Ars Technica. "We are gratified that after hearing all of the evidence, the Judge has completely vindicated our position."

The complexity of the DVD CCA's licensing agreement proved to be its downfall. Witnesses during the trial characterized the license drafting process as having been carried out over a series of 100+ meetings by a group of entertainment-industry lawyers with feedback from engineers. The result was a confusing standard licensing contract, one that omitted key details about the CSS General Specification.

Unfortunately for consumers, the decision is a narrow one. It looks to be applicable only to commercial home media server products that store single copies of a DVD in a copy-protected form for personal use. Kaleidescape's rips remain CSS protected on the hard drive, and Malcolm tells Ars that some parts have an "extra layer of AES-256 encryption." So those who wish to rip their own DVD libraries for personal use will continue to operate in the murky, grey intersection of the DMCA and fair use.

Although no formal appeal has been filed, it is likely that the DVD CCA will ask a higher court to overturn the decision.